Businesses and support

The coronavirus outbreak has undoubtedly had an effect on the economies around the world, with the tourism industry in particular being hit.

Here in Malta, the situation is no different. Travel fears have reduced the number of people booking flights abroad, and indeed with flights to Italy from the island being suspended, it comes as no surprise that this is a hard time for Malta’s hotels sector, as well as for all sectors that depend on tourism.

The business community has now been requesting some form of support from the government as a result of economic concern.

First of all, the health of the people who reside in Malta must be the government’s first priority, and it should feel at liberty to take any decisions it deems to be necessary in this regard.

Second to this, economic concerns must be considered. Malta’s economic growth is reliant on the success of the companies here in Malta. Malta’s largest sector is the tourism sector, so that sector taking a major hit would be a blow to the island’s economy which will not be felt right now, but in a few months down the line.

A number of requests have thus far been made. As an example, Malta Chamber of Commerce has called for an assistance package for businesses to mitigate any liquidity issues companies may face in the context of temporary loss of business due to COVID-19. At the same time, the Malta Chamber of SMEs highlighted that some sectors have already suffered significant losses due their absolute dependence on tourism and incoming events, and called on the government to support these enterprises in order to avoid their closure and job losses by making use of financial instruments to ensure liquidity and provide working capital by using existing state aid rules.

The government, however, while it should do what it can to help business in particularly trying times which are a result of circumstances beyond its control, should not break the bank in doing so. The tourism industry is a major sector in Malta and so if something can be done to help the sector sustain itself through this difficult period, then by all means.

Yes, measures need to be taken, but the government is not a personal bank for business, and while support must be given, it should not overdo it.

Businesses should also start coming up with plans in case there are any lasting economic effects as a result of the virus, and the fear of the virus. It is very difficult to picture the economy not taking a hit from this situation, but of course, the magnitude of this situation is not yet known, and one would need to wait longer before a clear picture can be painted. But this is not only a Maltese problem. Many other countries are suffering, some even more, like Italy. As such perhaps European solutions could also help minimise any major economic effects this situation will bring.